Wall Street turns green after weeks of wobbles… but an unseen monster lurks in the dark
Wall Street snapped back into the green on Monday after two weeks of stomach-churning swings.
In early trading, the Nasdaq was up 2 percent, the S&P was up more than 1 percent, and the Dow has swung to a 0.5 percent gain.
It's an upbeat start to a holiday-shortened week, powered by renewed confidence that the Federal Reserve is gearing up for a third rate cut this year.
But traders may be celebrating just as a different kind of crash creeps up behind them.
Bitcoin — long treated as a emotional barometer for investor sentiment, especially in volatile stretches — is in the middle of an ugly slide.
The world's largest cryptocurrency has fallen 5.5 percent in the last five days, 22 percent in the past month, and is now down 7.5 percent for the year. At its current level, it's trading at its lowest price since November 2024.
Some of its most devoted promoters think the pain is just getting started.
'Over the last decade, Bitcoin has drawn down over 30 percent or more 21 different times,' Anthony Pompliano, the CEO of Professional Capital Management and a major crypto fan, told CNBC.
Anthony Pompliano, the CEO of Professional Capital Management, said he's still optimistic about crypto - but sees the potential for a continued 35 percent runoff
Bitcoin has hit a rough patch in the past month, falling more than 20 percent after record highs in early October
'Of that, seven of the pullbacks have been 50 percent or more. That's like having a global financial crisis every year and a half for a decade.'
Pompliano thinks Bitcoin could drift 'sideways' for a few weeks before clawing back gains — but also conceded the sell-off could deepen.
And if last Thursday was any indication, Bitcoin's wobble isn't staying contained.
Traders went into the so-called 'triple whammy' — Nvidia earnings, Walmart earnings, and the federal jobs report — expecting major returns.
All three beat high expectations: Nvidia and Walmart crushed investor forecasts and the jobs report more than doubled investor predictions. By the textbook, stocks should've ripped higher.
Instead, the Dow cratered more than 1,000 points around noon — a nearly 4 percent collapse in just two hours — stunning traders who thought the mood was cheerful.
Analysts told the Daily Mail that Bitcoin's continued slide was the main culprit behind the market's sudden reversal. And Pompliano, for his part, still believes the crypto market has more room to fall.
'I do think that a 35 percent drawdown from the all-time high is a pretty healthy reset,' he said.
Wall Street expected major gains last week after it survived a 'triple whammy' with flying colors - but Bitcoin's continued struggles anchored optimism and drew the indexes into the red
'I think there is a question in the industry: is this going to be one of these very big drawdowns we've seen, or is this simply something that is more normal?'
On Monday, Deutsche Bank added to skepticism about Bitcoin's recent tumble, saying it exposed 'how fragile the market structure is.'
But for now, stocks seem willing to outrun the monster a little longer.
AI enthusiasm did some heavy lifting, with Alphabet up more than 5 percent on Monday after fresh praise for its new Gemini model.
Nvidia added another 0.7 percent, keeping the sector's momentum alive.
Still, that calm has been fragile for weeks.
Markets have been whiplashing for two weeks as investors debate whether AI's runaway rally is the future — or the beginning of another bubble.
And for now, the S&P 500 is still within 4.1 percent of its all-time high set last month.
But with crypto cracking, AI stocks stretched, and the Fed's December decision looming, the monster in the dark may not stay hidden for long.
